Competition Bureau warns of fraud schemes involving cryptocurrencies

The Competition Bureau is warning Canadians to be wary of cryptocurrency investments that seem too good to be true.

The bureau says there are many online ads and websites promising high returns, but these could be fraudsters tricking Canadians into investing in fake initial coin offerings.

Fraudsters are also conning investors who want to get in on the cryptocurrency craze with classic scams like pyramid schemes or fraudulent market manipulation.

Tips to stay protected

The Competition Bureau is offering some tips to protect investors from fraudulent cryptocurrency investment schemes:

Learn about cryptocurrencies and know the risks. Understand the investment. Recognize that information about the investment may be false or misleading. Also, know that it may be more difficult to enforce your rights against a business offering cryptocurrencies if they are not in Canada.

Be wary of any investment tip you receive through social media. Before investing consult a trusted financial advisor to determine if the investment is legitimate.

Be wary of “get-rich-quick” promises and skeptical of celebrity endorsements and testimonials.

Research the company and individuals behind the cryptocurrency investment. In general, anyone selling securities or offering investment advice must be registered with their provincial or territorial securities regulator.